TOKYO (Reuters) – – Global stocks traded close to record highs on Friday, with Asian stocks taking the lead on Wall Street as progress in vaccine distribution spurred bets on further normalization of the global economy and a recovery profits.
An index of the world’s top 50 markets, MSCI ACWI, rose 0.2% to 667.90, reaching a record high of 670.82 played about two weeks ago. It was the fifth consecutive day of gains.
European equities are expected to open steadily, with euro stoxx futures rising 0.3% at the start of trading, while Britain’s FTSE futures have remained stable.
The MSCI indicator for Asian stocks outside Japan rose 0.6%, while Japan’s Nikkei rose 1.5%.
On Wall Street, each of the major indices rose more than 1% on Thursday, with the Nasdaq Composite Index and the S&P 500 reaching historic records.
“What is driving the market is that corporate profits are showing a strong recovery,” said Jumpei Tanaka, strategist at Pictet.
“And there are piles of money saved in MMF (money market funds) and elsewhere that are likely to be invested in stocks as soon as the economy normalizes as vaccination programs progress.”
(GRAPHIC: Earnings recovery -)
Expectations of a strong stimulus from the government of U.S. President Joe Biden have also supported the feeling of risk, while better-than-expected data on US labor markets released in the past two days is creating a bullish mood. before the payroll report, which will be released at 13:30 GMT.
The US Treasury’s long-term yields increased in anticipation of a major Washington pandemic relief bill, as well as rising inflation expectations.
The 10-year benchmark yield stood at 1.177%, having risen to a three-week high of 1.162% the previous day, while 30-year bonds yielded 1.931%, close to its 10 1/2 month high of 1.951% played on Thursday.
Bond yields also soared in Europe, with yield on Germany’s 30-year government bonds returning to positive territory for the first time since September.
A market indicator of U.S. future inflation reached its highest level since October 2018, while that of the eurozone reached its highest level since May 2019.
In the foreign exchange market, the dollar strengthened against most of its peers, with traders’ focus shifting to the relative strength of US growth.
Until the past few weeks, the dollar had been sold under the expectation that a global economic recovery would promote outflows of funds for riskier safe-haven currencies.
The US dollar index was close to a two-month high, having soared 1.1% so far this week, underway for its biggest weekly increase since the end of October.
The euro changed hands at $ 1.1964, having reached a two-month low of $ 1.1952, while the yen reached a 3-1 / 2-month low of 105.70 per dollar.
“It seems that markets are now trying to negotiate economic normalization based on the progress of vaccination,” said Arihiro Nagata, general manager of global investment at Sumitomo Mitsui Bank.
“The fact that the only currencies that have been doing better than the dollar in the past two days are the pound sterling and the Israeli shekel, the two countries that are making the most progress in vaccination, seem to support this.”
The pound sterling stood at $ 1.3678, not far from its $ 1.3759 peak in 2 1/2 years, reached late last month.
The shekel has risen in the past two days, reversing its decline since mid-January, after the Bank of Israel stepped in to contain the shekel’s strength after reaching its peak in 24 years.
The dollar’s strength pushed gold to a two-month low of $ 1,785.10 an ounce on Thursday. The metal was last traded at $ 1,797.40.
Oil increased its gains with the optimistic economic climate, the fall in inventories and the OPEC + decision to maintain its cuts in production.
US crude oil rose 1% to $ 56.80 a barrel and Brent was $ 59.38, up 0.9%.
Additional reporting by Imani Moise; Edition by Richard Chang, Christian Schmollinger and Ana Nicolaci da Costa